Royal Bank of Scotland will pay record fine for crisis-era misconduct

Royal Bank of Scotland will pay $4.9 billion to settle charges that it misled investors ahead of the 2008 financial crisis.

It's the largest penalty the Justice Department has imposed on a bank for crisis-era misconduct.

"This resolution — the largest of its kind — holds RBS accountable for defrauding the people and institutions that form the backbone of our investing community," Andrew Lelling, the top federal prosecutor in Massachusetts, said in a statement.

From 2005 to 2008, RBS "routinely made misrepresentations to investors" who bought securities backed by risky mortgages, concealing their high risk of default, the Justice Department said Tuesday.

The US government has reached settlements with numerous banks over their conduct before the crisis.

Earlier this month, the Justice Department hit Wells Fargo(WFC) with a $2.09 billion fine for originating and selling mortgage loans that ended up in toxic securities. The bank did not admit liability as part of the settlement.